ChartAdvisor for July 25, 2014

Major U.S. indices were mixed over the past week, as the U.S. economy showed some ongoing signs of recovery. Durable goods orders exceeded analyst estimates in June, jumping 0.7% by the Department of Commerce’s estimates, while durable goods inventories rose 0.4% and could boost second quarter growth. Core capital goods fell 1% last month, however, suggesting that business spending is on the decline. (For the previous week's summary, see: ChartAdvisor for July 17, 2014.)

International markets were also mixed over the past week. Japan’s Nikkei 225 rose 0.99%; Germany’s DAX 30 fell 0.78%; and Britain’s FTSE 100 rose 0.55% over the past week. In Europe, leading indicators edged up to 54.0 from 52.8 in June despite an ongoing slowdown in France and worries about Ukraine. In Asia, Japanese investors worried about a slowdown in inflation that could stunt its growth.

The SPDR S&P 500 (SPY) ETF rose 0.02% higher over the past week. After reaching new highs earlier this month, the index moved lower towards its R1 resistance at 197.80. Traders should watch for a rebound above these levels to retest its upper trend line and R2 resistance at 199.87 or a move down to its pivot point and 50-day moving average at around 194.25. Looking at technical indicators, the RSI appears neutral while the MACD is showing a bearish divergence.

The SPDR Dow Jones Industrial Average (DIA) ETF moved 0.83% lower over the past week. After reaching new highs earlier this month, the index fell below its trend line support towards its R1 resistance at 169.27. Traders should watch for a retest of that key trend line support on the upside or a move lower to its pivot point and 50-day moving average at around 167.88. Looking at technical indicators, both the RSI and the MACD appear to be relatively neutral.

The PowerShares QQQ (QQQ) ETF moved 0.65% higher over the past week. After reaching new highs earlier this month, the index fell back to its R2 resistance at 96.56 after a mid-week rally higher. Traders should watch for a return to new highs on the upside or a move down to retest prior support at around 95.90 on the downside. Looking at technical indicators, the RSI appears modestly overbought at 64.43 while the MACD remains relatively neutral.

The iShares Russell 2000 (IWM) ETF moved 0.55% lower over the past week. After being battered earlier this month, the index appears to have stabilized towards the middle of its price channel. Traders should watch for a move higher towards its upper trend line at 120.00 on the upside or a move lower towards its lower trend line at 108.00 on the downside. Looking at technical indicators, the RSI appears neutral while the MACD remains in a bearish downtrend. (For a lit of technical indicators, click here.)

The Bottom Line

The major U.S. indices were mixed over the past week after mixed economic and earnings news in the market. Next week, traders will be closely watching a number of key economic indicators including GDP and FOMC data on July 30, jobless claims on July 31, and employment data and ISM manufacturing data on Aug. 1st. Earnings will also remain in focus, especially in the still-bullish tech sector.